Tuesday, October 11, 2016

Cuomo Insider, Caught in Albany Corruption Case, Leaves Post at SUNY

Alain E. Kaloyeros during his arraignment in Albany in September. He was charged in a voluminous federal complaint alleging a campaign of fraud, conspiracy, bribery and bid-rigging.CreditWill Waldron/The Albany Times Union, via Associated Press

Alain E. Kaloyeros resigned as president of the State University of New York Polytechnic Institute on Tuesday, marking not only the fall of one of the state’s most powerful and best-paid employees, but also a very public pratfall for a university system that has been a ready lever of power for Gov. Andrew M. Cuomo.

The resignation did not come as a complete surprise: Dr. Kaloyeros, 60, was one of nine Cuomo insiders, associates and donors who were charged in a voluminous federal complaint alleging a campaign of fraud, conspiracy, bribery and bid-rigging.

A flamboyant Lebanese-born physicist known as Dr. K, Dr. Kaloyeros was also at the center of a separate complaint brought by the state attorney general, Eric T. Schneiderman. That inquiry was related to projects in Albany, where he had built a billion-dollar collection of research facilities that helped fuel his reputation in the field of nanotechnology.

Dr. Kaloyeros’s image was further bolstered by the governor, who called him “New York’s secret weapon.”

But on Tuesday, that weapon had been disarmed.

“It has been my great privilege to serve as president and deeply rewarding to see SUNY Poly’s growth over the years,” Dr. Kaloyeros said in a brief resignation letter. “I am proud to have contributed to that. Now, however, I recognize that my continued leadership would pose a distraction from SUNY Poly continuing its good work.”

The complaint announced on Sept. 22 by Preet Bharara, the United States attorney in Manhattan, also resulted in charges against two of Mr. Cuomo’s former top aides: Joseph Percoco, who served as his executive deputy secretary and close confidant, and Todd R. Howe, whose relationship with Mr. Cuomo, a Democrat, dates back to the days his father, Mario M. Cuomo was governor.

But the complaint also offered an unflattering view of Mr. Cuomo’s preferred method of upstate development, which combined Dr. Kaloyeros’s vision of high-tech hubs in faded Erie Canal cities with the university’s ability to initiate large construction projects with less oversight than state agencies.

That included the so-called Buffalo Billion, which has poured hundreds of millions of dollars into that city, largely under the auspices of SUNY Poly. In the wake of Mr. Bharara’s complaint, Dr. Kaloyeros had already been suspended without pay, and Mr. Cuomo had already transferred authority for the Buffalo Billion to Empire State Development.

In remarks shortly after the arrest of Dr. Kaloyeros, Mr. Cuomo promised that the development agency’s leader, Howard Zemsky, would work “to learn from what happened.”

Since then, Mr. Cuomo has repeated the assertion that SUNY bears the bulk of the responsibility for the scandal.

“Not to sound defensive, but this happened through the State University of New York, the SUNY system’s purchasing and procurement process,” he said in response to a reporter’s question in late September. “I appoint people to the State University board, but it’s not in my office.”

Such a statement is in stark contrast to the mutually beneficial relationship the governor usually has with the state university.

Indeed, during his more than five years in office, the governor has used the university system to highlight social issues like reducing sexual assault on campuses. In early January, the system offered the governor another chance to burnish his liberal credentials when he announcedthat SUNY would raise its minimum wage to $15. The move also provided momentum for the statewide $15 minimum wage, something the governor mostly achieved as part of a budget deal in March.

SUNY has also served as an anchor for other economic development programs, including Start-Up New York, which offers a decade of tax-free status to businesses that start, expand or move to locations near colleges.

The governor’s emphasis on the university system as an economic system has bothered some interested parties, including Frederick E. Kowal, the president of the United University Professions, a union that represents SUNY professors.

“SUNY has always been an economic engine,” Mr. Kowal said. “But we think the balance between an economic role and academic role has gone out of balance.”

As part of his resignation, Dr. Kaloyeros — who often earned more than $1 million per year — requested that he be allowed to continue as a member of the faculty.

A version of this article appears in print on October 12, 2016, on page A21 of the New York edition with the headline: Cuomo Insider, Caught in Albany Graft Case, Leaves Post at SUNY. Order Reprints|Today's Paper|Subscribe